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Taiwan Outlook

Series/Special. Interviews with experts on major policies and current affair issues.

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PBS

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01:01:00

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Canada 16, Imax 14, U.s. 14, China 14, Us 8, Asia America 8, Washington 6, Egypt 5, Facebook 5, Europe 4, Michelle Mccoury 3, Ben Bernanke 3, United States 3, Alberta 3, Beijing 3, Keystone 3, Shanghai 3, Asia 3, Sands 2, Harley Davidson 2,
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  PBS    Taiwan Outlook    Series/Special. Interviews with experts on  
   major policies and current affair issues.  

    October 30, 2013
    11:00 - 12:01am PDT  

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>> in the united states federal reserve stands by its stimulus for now, but as for the next time, there were some big question marks. >> i am michelle mccoury at the nasdaq market site in times square, new york. despite the fed staying steady on stimulus, u.s. markets drop across the board, and facebook reports phenomenal earnings, but the shares slipped in after- hours trading grid we will tell you why.
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♪ >> it is 9:00 in washington. many other cities. we will look at china's banks. they have cash in on a big quarter in the third quarter. we will have the numbers plus in-depth analysis on the health of that sector. plus -- >> anyone who equates the rejection of keystone xl with some kind of body blow to the oilsands is just plain wrong. >> canada remains committed to developing its natural oils fans even as the debate rages in the u.s. over the extension of the keystone pipeline. in our latest special series, oilsands at a crossroads. that will be coming up in just a short bit. the top story is the u.s. federal reserve has decided to continue pumping liquidity into capital markets at a tune of 285
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billion dollars a month. our correspondent here in washington is daniel wrenches and has been following the story. it wasn't big news, but there was big news out of it. >> it is very interesting that they decided to avoid this process they are calling tapering. at the end of this two-day meeting, they decided to leave it alone and wait and see. this summer, fed chairman ben bernanke said if the u.s. economy continued picking up speed, then the fed would start reducing bond purchases. today, members of the federal open market committee aren't sure if the american economic engine is strong enough to produce -- reduce unemployment and increase growth. >> the two parties need to sit down together and take this seriously. there is a huge movement in the business world. they are writing letters to the leaders, saying, this is no
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joke. if you come -- continue this way, the real economy will be affected. >> economic data has been distorted by the ever mentioned him the brinksmanship over raising the debt ceiling. the postmeeting statement notes that fiscal policy is restraining growth and that the housing sector has slowed somewhat. but the committee members to see underlying strength in the economy and will await more evidence before deciding to slow the stimulus effort known as tapering. >> they have to say, tapering is a possibility at the end of the year, even though i don't think they will. the data that is going to be coming out in the next couple of months is going to be weaker than expected. >> ultralow interest rate policy incentivizes investors to buy cheap stocks, raising valuations even though the broader economy remains subdued, raising the risk of a jarring market correction.
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fed vice chair janet yellen is expected to take over the chair from ben bernanke sometime in the new year. she will be facing a very complex task to gradually reduce the nation's reliance on all of the stimulus, and at the same time, try not to upset the apple cart and upset the u.s. economic recovery, which after all is being challenged by all of this dysfunction in washington. >> we can talk an hour about dysfunction, but there are a group of folks that are really being penalized because of the stimulus. you go to the data and put in your deposits, you make zero percent. that affects savers and senior citizens. is there a sense that perhaps at some point that this has got to end because you are penalizing people for being careful with their money? >> no, not really. [laughter] the problem at the moment is they are kind of addicted to it. we saw, when even ben bernanke raise the idea of slightly
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steeper in -- slightly tapering the stimulus program, not even raising interest rates, slightly tapering the amount they will inject into the economy each month, $85 billion, in the markets reacted interesting -- instantly. everyone kind of short back. even the fed sharks back. at the moment, they are beholden a little bit to the people who are taking the risks and getting the easy money. if they pull back on that too soon, that's going to upset the apple cart for everyone. it affects your stocks. it affects your pension. all of those savers, and different ways. yes, think the people who really lose out are people who have been financially prudent, put money in their bank account just to be safe, for a rainy day, or just come in this case, for pensions. >> or in my case, the shoebox on the decks. always good to have you on this segment. michelle mccoury is in new york city. keith fitzgerald is outside here
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in washington, d.c. let's start with michelle for reaction from wall street. >> the fed's decision to continue its $85 billion a month bond-buying program did not spark a rally. in fact come it was a volatile trading day. the dow and the s&p both hit intraday highs, but closed in the red. initially, markets traded flat on the fed status quo message. then reports from "the wall street journal" that the fed could begin tapering a as december caused some discerned -- caused some concern. the nasdaq declined 0.5%. other analysts say today's decline was due to that meeting wall street saying, buy on the room up, sell on the - we have had a strong run with confirmation there is no immediate tapering scheduled. on the earnings front, linkedin tanked overnight -- over 9%.
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earnings did top expectations, but the network site should current quarter revenue guidance below forecasts. western union tumbled over 12% after the money transfer company reported a 20% decline in earnings. however, general motors revved up over 3% after reporting stronger-than-expected quarterly profits, thanks to strengthen its core north american market and a smaller than anticipated loss in europe. another fact that was laying on the markets today, a report that hiring is on the decline. from small businesses to medium- sized firms, a new report shows u.s. employers are not hiring as much as much as they were earlier this year. private sector employers added just 130,000 jobs to their payrolls this month, and that is about 20,000 shy of what economists were expecting. adp's national employment report covers the two-week government
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shutdown and the bitter debt ceiling battle. the labor department's snapshot for october will be released next week. it has actually been delayed by a week because of that government shutdown. i'm going to be back later on in the show with the latest on facebook's phenomenal earnings, but right now, more on the fed with you. >> another while the story. michelle, thank you. let's start with keith fitzgerald, chief investment officer at map -- money map press. good to see you, sir. welcome to "biz asia america." let me start with the federal reserve, this tapering. explain to us why do we even care whether or not the fed tapers or doesn't taper. >> you care because of this -- the fed has maintained a program where it is artificially keeping interest rates low by injecting $85 billion a month of liquidity into the markets. what that means in plain english is they are using a tremendous amount of money to buy bonds and
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presumptively keep interest rates that want to go up actually down. the theory is that this will trickle into the rest of the economy in the form of spending, low interest rates, low mortgage rates, low credit card debt, and the consumer will feel emboldened, they will borrow more, and they will spend more. in the united states, consumer spending makes up 70% of the economy. the fed is out of bullets and they are out of magic tricks. this isn't working as well as it used to, which is why you saw a lot of hesitation when the fed acknowledged it is just went to continue, but not really do anything about it. >> one and one argue that it has worked? the housing market has bounced back. the markets for all intents and purposes are at all-time highs. what hasn't worked about it? >> that is a very interesting point. it is a very valid one. here is the issue. the stock market has gone up something like 83%-95% off its 2009 lows. consumer spending has risen only 9%. you have a huge divergence.
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what that points to is that the stock market has enjoyed the liquidity boom, but the consumers have not. the worry whenever you see a divergence is there's got to be one of two things happening -- either earnings have got to come down, market prices have to come down, or earnings have to come up. either way, there is a looming correction. his is a classic sign for technical traders that there is maybe a danger sign. >> the other thing i want to get to is this money printing, this quantitative easing, the tapering. why do i care whether they print more money or not? it doesn't seem to affect the rest of the economy terms of when i go to a store and buy something. is it all that bad? >> that's the real issue. they have bailed out main street , and they have left that middle america. wall street has left them out pretty yes, you do care. if they take that liquidity away , then instantly credit grinds to a halt. all of the lending that you presumptively expect to be there isn't.
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the consumer who is addicted to debt, the stock market which is addicted to debt immediately says, where is all my money? prices correct artificially. >> i think we should just bring one of our credit cards right now. yes, we like our debt and credit cards, but i want to ask you about the economy a bit more. when you talk about interest rates, this tapering doesn't even affect interest rates quite yet, but rates are at zero. when will they actually increase rates, and is america or the world ready for higher interest rates, whether it comes out in 2014 or 2015 or 2016? >> that is an interesting question. if you are a keynesian economist, you say, no. i want the interest rates as low as possible. that is going to allow the government and the fed to make up the gap, the spending gap, until you can acquire enough growth that you begin taking bad assets off the sheet./ if you are an austrian economist, you say no, you got to let rates rise naturally, and companies have to die to make that happen in order to provide success.
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i personally of the letter school trip think we have to -- the latter school. there is no quantitative, and." which approve that. this is like taking cough medicine in small doses. you still got to swallow the stuff. it is still going to taste bad. the question is, on whose watch is this going to occur? bernanke doesn't want it on his watch for the congress doesn't want it on his watch. the president doesn't want it on his watch. >> it's not a silly question, but it is something that has been bugging me for a while -- united states government sets interest rates. those interest rates, we pay treasuries. if we raise the rates, aren't we basically saying that we will have to pay other people more money in terms of the debt that we owe? why would the u.s. want to raise interest rates basically on ourselves? it doesn't seem to make any sense. wouldn't we want rates of zero because that is the cheapest way to go? >> yes. if you've got too much money, there's got to be a certain
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amount of deleveraging that takes place. consumers, for example, in the middle-class don't want to debt. we saw in japan in the 1990s -- the bank of japan took interest rates to zero, and consumer still do not want it. you see that in portions of europe were interest rates are negative. here in the united states, without the same phenomenon. the fed is keeping interest rates so low that savers come as you pointed out earlier, are being penalized. they are being involuntarily stripped of that asset and it is being foisted upon people who have been responsible with their money. -- have been your responsible with their money. >> thank you very much for joining us from portland, oregon. we take a short break right now. still to come, our big and latest on our series of oil sands at the crossroads. thus, we will talk about china's banks. profits are starting to cool off, as welker and we will get the details from shanghai.
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-- cool off as well. we will get the details from shanghai.
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>> welcome back to "biz asia america." china's big banks reported slowing profits and bad loans also improved. for more details, we go to shanghai. hello. >> hi, phil. it's actually not too bad. if we look at the numbers, the banks earnings rose between 7% and 14% in the third quarter. that means those banks are still among the most profitable in the world. the thing is, as china slows, so do the big banks. especially after china moves to free interest rates, that is really affecting those big banks
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and their lending margins, which is their main source of revenue. there is simply more competition from private banks. that means those big banks will have to diversify to expand overseas and also to sell more financial products. in terms of bad loans, the consensus view is high, but the number improved comics up for the bank of china. it is the smaller banks with the bigger problem of debt. all of the banks are waiting for more interest rate reforms from next month's policy meeting. >> this policy meeting, the markets seem to like it for the most part. what has the reaction been so far? >> that's right. investors obviously like the reforms come as you mentioned. stocks rose on wednesday in sectors such as utilities, power, and energy. it is believed that these sectors will be benefiting from the policies at the meeting.
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on the other hand, investors were also taking profits in sectors such as the free trade zone-related sectors. analysts are telling us the markets are sadly preparing for the what if scenario in case the policy meeting disappoints. investors are also waiting for the official china pmi for october, which is expected to hit a 1.5 year high tom according to a reuters poll. >> we will continue to wait with you. the feeling, thank you for joining us live from shanghai to discuss the health of the chinese banking industry. the partner of greater china elite, a leader at ernst & young in beijing, weighed in with me and whether beijing is more worried about this credit or bad loans. >> i wouldn't think the government is very much worried about bad loans, too much money in the system. they just try to control the pace of the growth into a more
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healthy pace. that means they want their business to grow, but they want the business to grow at a more healthy pace, and also, to be more controlled. >> this bad loan at the banking sector, a lot of people have talked about it for years -- the people who say it is going to be a big problem side effect affected there are always loans that are made. the bad loans are going to rise. that is bad for the banks. on the other hand, a lot of folks say, look, thanks in china have a lot of money. they are very big. even if there is a lot of bad loans, they should be able to absorb those bad loans, which is true. >> i would say since we are in the process of interest rate operation, -- liberation, a lot of the spread between -- of the spread is between traffic and lending. the profits are quite good in
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the past years. however, we also need to see that the liberation of the interest rates, it is driving banks to lend to high-risk customers. they are also calling for the increase of the npl at the provision level of the credit business. i would say it is controllable. in my view, the provision and npl position in the china banking sector is still very well controlled. i wouldn't say it is a major concern, but we need to be closely monitoring it. >> as somebody who has looked at china's banking system for so many years, you are an expert on this. when you look at the housing market, the banking industry, the foreign exchange industry, what is the number one thing you worry about? >> i would say that actually the
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banking, their motivation is driving for the profits, and they always put risk management off their minds. that will make their business grow in a very risky position. it is also a phenomenon where the npl ratio will go up. a good strategy in china, the capital strategy -- we are promoting the concept that you have limited capital, and you need to control your business to a healthier growth rate, and you need to investor capital -- invest your capital into better businesses which will give you help your revenue returns. that is a concept called the capital strategy to aim for a more sound business plan and business strategy. >> that was a partner at ernst &
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young. coming up on "biz asia america," we go to our weeklong series and our latest installment. we will look at the canadian perspective of environmental protection to the government pressing for more development of the oil sands. that is coming up next.
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>> our weeklong series oil sands at a crossroads continues. this is the controversial development of canada's oil sands. as with many of canada's natural resources, the oil sands were discovered by the aboriginal people who first inhabited the land. they used the tar substance to
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waterproof clothing and canoes. commercial developer and began in the 1960s. in 1967, suncor energy constructed a rig. the second mine began almost 20 years later is in 1978. that was a private public mentor -- venture which included the canadian and alberta governments. that area has taken off. by 2011, well since production hit 1.7 million barrels every day. that is growing every single year. one of the main issues is how to get all of that oil to the buyers. one way is to -- is the controversial keystone pipeline, which is grabbed headlines in the states, but the canadian government is backing other pipeline projects to reach europe and asia. more from toronto on this. christian? >> the oil sands is a huge topic here, a hot topic. it already generates a massive amount of jobs in canada and generates huge revenues for the
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federal government. there are concerns though about the environment impact of this project. the san saba and sold to the public as an economic benefit. despite those of concerns about his country's record and the cleanness of the soil, the government really has so much riding on the oil sands project, but it has no chance -- choice but continuing to travel around the world counting it to buyers. passing over this vast archly unspoiled country, it is hard to believe canada is one of the world's leading energy powerhouse is great whether it is coal, uranium, natural gas, or crude oil, it is here, and the government has big plans to use it. >> canada is one of the largest producers in the world, and in almost every case, some of the largest reserves in the world. whatever the energy mix is in the future, i tell people canada will be a major provider. >> with enough reserves to last
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150 years, oil from the alberta tar sands is canada's most bankable commodity. during a 25-year span, the canada energy institute estimates that oil sands will at about $2 trillion in u.s. dollars to the canadian economy. with current pipelines at full capacity, there is a puddle neck -- bottleneck. along with the keystone xl extension, pipelines are planned for canada's east and west coasts. a northern project is a twin pipeline system that would help deliver oil to emerging asian markets while transcanada corporation plans to build the energy east pipeline, which would allow for shipping across the atlantic. to speed up the process, the government has put more power in the hands of ministers. according to environmentalists, this means entities which look at the impact of the plans can now be legally ignored. groups like greenpeace want canada to abandon the fossil fuels entirely. >> we want to move off oil as quickly as possible.
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we think rather than investing in expansion of the tar sands or in shale oil in the u.s., we should be investing in greener alternatives to fight climate change, all forms of pollution, and just long-term human saturday. >> others say canada cannot survive without developing the oilsands deposits. >> we would be looking at higher oil prices. therefore, higher gasoline prices. we would also be looking at communities within western canada that no longer have the economic drivers there to sustain themselves. >> sustaining or not, many communities have expressed concerns about the impacts of rampant energy exploration. to calm those fears, canada's natural resources minister has promised to come down hard on polluters and protect the indigenous people. >> the key pillar of our plan is to uphold our moral and constitutional obligations to canada's first nations and other aboriginal peoples. >> there was also a defined warning to opponents.
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the oilsands project will continue. >> canadian resource development and export, including from the oil sands, will continue keystone or no keystone. this is important to understand. anyone who equates the rejection of keystone xl with some kind of body blow to the oilsands is just plain wrong. >> there is an economic argument for sending this oil further afield.ennahda sells to the u.s. at a lower price per barrel and it would get far more selling to europe and asia. while the white house considers it's a verdict on keystone, oil firms and the government here have arty set their sights elsewhere. >> christian, this has been such a politically-heated battle, but it is also very emotional. in your research, how do the canadians feel about these sort of new pipelines as they go across the land? >> to give you an idea of how divisive the oilsands project is
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, and keystone specifically, a poll last week found that 42% of canadians are in support of keystone, up against 41% that oppose it. that is up slightly from spring when just 38% were in favor of the keystone pipeline. what has changed since then? we've had a major rail crash involving oil cars. derailments here involving oil cars are a regular occurrence. the pipelines here are by no means perfect either, but the public broadcaster cbc reported this week that the number of safety incidents involving the pipelines here has doubled in a decade, more than 1000 such incidents in 10 years. a lot of questions remain about the impact of this oil regardless of how it is transported. >> all those questions. it seems that there is no clear- cut answer. thank you very much. we are now going to talk to one expert who has been covering the story in great detail. gilliam stewart is a calgary- based writer and journalist and
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a former managing editor at the "calgary herald." she also writes for "the toronto star." welcome to "biz asia america." you heard what christian said earlier about this -- all these questions. it doesn't seem like there are answers. the tone of the dialogue, the debate, you have been following this closely. we are interested to hear what your thoughts are as to which direction this debate is going towards. >> well, you know, in canada, and particularly in this part of canada which is in the west were the oilsands or tar sands are rotated -- are located, there is a lot of support for keystone xl. people here want it to go ahead. there is some opposition, but not much. in other parts of canada, there is more of a generalized opposition to keystone, and it is mainly because of greenhouse gas emissions. the oil sands are carbon-intense in terms of production, and
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their greenhouse gas emissions are doing nothing but going up. there's a lot of concern about that. i think some environmentalists and other people in general would like to see those emissions come down. they see stopping keystone xl as one way to make that point. >> canada has been famous for its environmental protection laws and regulations. i can only imagine some of the critics out there would be very much against producing or disrupting any natural resources there. what is the number one issue you hear from the critics when they talk about not building this pipeline here, specifically about going to the west coast in terms of exports to asia? >> i think that there are two different issues here. the keystone pipeline is going down south, right? it is headed through montana, nebraska, and it is going to end up at the refineries on the
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texas gulf for export. that pipeline doesn't so much affect canada, right, because we already have lots of pipelines, particularly in this part of the world. as i said earlier, the greenhouse gas emissions is an issue here for a lot of environmentalists. the bigger issue for a lot of canadians, but particularly people on the west coast, is the pipeline being proposed from the oilsands to the west coast through british columbia. that would be oil that is destined for asian markets. there is a lot of opposition in british columbia to that pipeline from environmentalists, from invited ash from aboriginal people, from people who said we live for the pipeline -- from aboriginal people, from people who live near the pipeline. it is going to go onto the coast. there will be tankers with oil going through pretty dangerous waters. there is lots of opposition in british columbia to that
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particular pipeline, to the northern gateway pipeline. >> i want to ask you something -- i come from the background of, if you don't like something, you should give an alternative. one of the alternatives that has been put out there is using rail to get that oil through railcars to which ever port you need to get to predict the railways obviously like this. is that a reasonable solution, or is this pipeline, is it much more efficient? >> i think the pipelines are more efficient. i don't think there is any question about that. there have been a lot of questions lately about transporting oil by rail, simply because there have been some terrible accidents, like the one in québec. there have been subsequent derailments of oil tankers, oil cars even in alberta, which is frightened a lot of people. i think rail is being seen now as a way to transport the oil. the pipelines seem kind of
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plugged up. i don't think it is a necessarily a something that will replace device. >> i only have a few seconds more. i apologize. i want to quickly ask you -- you have been covering this in- depth. has anything come out as a surprise to you, or what has been the biggest surprise in your research on this? >> the biggest surprise has been the opposition to the northern gateway pipeline in british columbia. that opposition seems to have grown. it has caused a lot of stalling. this project seems to be taking a lot longer than people thought. as is true of the keystone pipeline in the united states. it has been going on for a long time. a decision hasn't been made. >> gilliam stewart, thank you very much, joining us from calgary. we have been talking about the canadian side of the issue, but coming up in our next installment, we will look at the u.s. side where politicians are scoring points for being both for and against this big project.
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we will have a very big debate coming up tomorrow. first come after this break, we will look at what is making news around the world. facebook's earnings and profits grow. the stock is down after hours. we will go live to san francisco for the latest. >> a check on your world headlines this hour. beijing says monday's car crash in tiananmen square was a well planned and organized terrorist attack and five suspects have been a wretch -- have been arrested. the suicide attack killed five people. one woman from the philippines, three terrorists, and a chinese vented in southern india, the buses crashed into a highway barrier and erupted into flames, killing 45 people. the driver and five passengers escaped through a window, but others were trapped.
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the bus had a locking system controlled by the driver. it was passing another vehicle when it crashed on an overnight trip from bangalore. syrian president bashar al-assad says foreign support for the armed opposition must and if a political solution to the country civil war is ever to succeed. i thought it made those comments wednesday to the united nations and arab league advisor to syria. he was in damascus trying to lay the groundwork for proposed peace talks next month. meantime, violence continued across syria. new videos released by rebel groups showed air attacks in many provinces. those are the top headlines. i am mike walter in washington. "biz asia america" continues right now. >> welcome back to "biz asia america." i am michelle mccoury at the nasdaq market site in times square, new york. >> and washington, d.c., item philip en. these are the other top
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headlines we're watching for you. cyprus needs to concentrate on rebuilding its gutted banking sector. that is according to a group of experts predict they were looking -- of experts. nearby in spain, they are no longer in recession. data released shows the country's economy grew in the third quarter. that and the two-year recession, but unemployment remains a very high. over in japan, regulators say an uncontained fuel plant of the fukushima nuclear plant can now be removed. removing the rods is obviously not easy, and it is a major step in decommissioning that plant. >> facebook crushing wall street earnings expectations today, reporting better-than-expected third-quarter profits and sales. shares rose in the immediate after-hours trading to a new high of more than $56 a share,
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about 15%, but they since tanked and are down now about zero point -- 0.4%. our correspondent is standing by in san francisco with all the latest. >> that's right. why all the ups and downs? facebook turned out a profit of $.25 a share, well exceeding analyst estimates of $.19 a share. revenue is up 60% from a year ago. the even bigger news that caused the stock to jump is the mobile monthly active users are up 18% from a year ago. revenue from advertising increased 66%. prior to today, facebook shares had already been white hot him up more than 50% since july when the company also delivered on its promise of growth, especially in the mobile space. many analysts believe the social media giants future prospects hinge upon continued expansion into the mobile advertising space. hubert wynn says facebook is well-equipped for that challenge.
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>> i still think that facebook has a lot of levers to tweak the levels of ad revenues. so far, they have been relatively conservative. i analyzing your data, they should be able to show more ads. i think advertisers are building more relevant ads, as well. even though they can be quite big, and it is not getting to the point where people are being bothered by them. >> there has been a lot of talk about whether facebook is losing popularity among young people. the cfo appeared to be admitting to some of this in some respects during the after earnings conference call. it did facebook actually give any numbers for the details on this? >> many are tracking that drop to a point during the earnings call when the cfo said, while youth engagement is stable, younger teens saw a decrease in daily active users.
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he didn't try to downplay the statement, saying the decline was slight and not questionable. it is interesting. there is a claim that mark zuckerberg himself said that facebook's own data show that they were not losing people. none of that data was ever released. very recently, a financial firm did its own survey of u.s. teens and found that 26% of them named twitter as their favorite social media site compared to 23% who named facebook. that is a drop of 10% for facebook compared to a survey taken six months earlier. don't think facebook is losing friends that fast. remember the $1 billion purchases made of instagram? it may be paying off. 22% of teens surveyed said instagram was her favorite -- was their favorite. >> thanks so much for that. tted that young teens are losing interest in the website? >> i think there is a lot of information coming into the market about facebook. people tend to notice the
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flipside of things first, even when you have a blowout earnings call, like facebook did. i think you are right. there is also a report that came out recently from forrester research, which questioned the efficacy of ads on facebook. it may be a reaction to both of these factors. >> as we saw in mark's report, there was a recent report issued by jeffrey and supported by data from pew research, and it shows that facebook's importance with teens dropped to 23% this fall compared to 42% last quarter. last year, ceo mark zuckerberg said it just isn't true that the company's second problem with the teen market. but his facebook still cool -- is facebook still cool? >> with the younger crowd, facebook is still cool. the younger crowd tends to move to newer vehicles. the big one here in north america is a snapshot -- sn apchat. it raised an unbelievable amount
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of money. they have a lot of young people flocking to it. in some ways -- some ways, young teens are the revenue engines in the future. they are the growth engines of the future. it is wise for investors and others to watch for those trends. they tell you where the market will be in two years or more. >> ok, but what about instagram? does that still have the cool cachet, keeping in mind facebook bot instagram and said it will start selling out on instagram very shortly? where do things stand on instagram, with facebook monetizing it? >> that is a great question. instagram provide something that is very relevant today. people are going into visual media. facebook started as a stream of primarily text. then they could add photos and videos, not in a fundamentally interactive way. instagram gives them that capability. this is what teens want. this is what young people want.
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this is what advertisers want. i'm quite sure that they will find a way to monetize this medium. this is the kind of retention and attention that advertisers are looking for. picture stuff, visual stuff. >> speaking of advertising, let's focus on the good news. mobile ads now account for about 49% of facebook's ad revenues. that's a pretty big deal. why do think facebook has been so successful with selling in the mobile space? >> i think a lot of that has to do with changing consumer trends and behavior. all of these social networks have started reporting how many more users, how more users increasingly use the mobile platform. linkedin said on a recent call that 30% of their visits actually originate on a mobile device. they expect that number to be 50% next year. you're absolutely following in a trend of changing consumer behavior in terms of how they
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interact with each other and how they use these platforms. right behind that is the ability to monetize it. in some cases, the mobile advertising phenomenon started many years ago, five or six years ago, before these platforms were ready. even before smartphones were quite ready. now i think we are seeing a concurrence of events. a set of things are coming together that will allow that underlying mobile investment and enablement to actually take off now and produce the kind of results that people have been struggling to see over the last four or five years. >> all right. we are going to have to leave it there. thank you so much. yes, facebook is doing great in the mobile space. speaking of mobile, after some customers complained, apple admits that his latest iphones are less than perfect. a company spokesman has confirmed that a "manufacturing issue" affected a very limited number of iphone 5s s device is.
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that could cause the battery to take longer to charge. the company is reaching out to companies -- customers with defective clones. -- phones. apple indicated that it was in fact in the thousands. we are taking a quick break here on "biz asia america," but when we come back, we will focus on why imax hopes to bring the magic of its mega-screens to individual homes in china. that plus an interview with the company's ceo about film innovation, just ahead. stay tuned.
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>> welcome back. imax is looking to expand from the movie theater right into the living rooms of consumers.
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the company has partnered with tc multimedia technology to develop a home theater system. it is expected to be a smaller version of what is currently in commercial theaters with a few custom elements. tcl's chairman admits there is one main issue. >> customer service will be a big challenge for us to develop. the imax home system will require a team of specialists who know how to fix problems when our users experience any situation. >> executives say the first market they will target is china. the imax tcl home theater will be released in 2015. meanwhile, imax has 785 theaters and 55 countries, and it is still opening theaters and several emerging markets group i spoke with the company's ceo about where he is seeing the most growth and what kind of new technology is in the works. >> pressure has been a fantastic
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market for us. we have about 40 theaters in russia. ironically, western europe, which you would have thought would develop a long time ago, because of space limitations, we have recently made a lot of progress. we are opening an imax theater at leicester square in london. we have eight theaters and all of the u.k. -- had eight theaters in all of the u.k. years ago. latin america, a developing economy. the middle east. those are our high-growth areas. >> you have developed this laser technology. tell me about that. >> one of the issues with imac sort any projection system right now is that they are all electronic-based, and they are limited by how it -- by how hot the bold get screwed if it gets too hot, it explodes. we had to figure out how we could like even bigger screens and make them brighter. the way to do that, it turns out, is through laser technology rather than electric technology.
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about three years ago, we started a five-year effort to create this technology for the larger screens. eventually, you will be able to have imax theaters 100-feet wide in the digital world, and images that are much brighter than inx images today. we expect to introduce that in late 2014 and first roll it out in these very large theaters and eventually maybe roll it out in some of the smaller theaters. >> have you found that the home entertainment system, the netflix, the streaming movies online, have you found that it has taken a toll on your business? it has impacted regular movie theaters. what impact has it had on nymex? -- on imax? >> we think it has had a positive impact. the reason for that is as screens get bigger and the home, images get better. you have more of a choice of content, as you say, whether it is streaming or gaming or whatever it is. people are still social animals.
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when they leave the house, they want something very different than they can get in the house. in the home, the experience is, as it gets better, people need something special. imax fills that void, unless you are a king or queen or sultan. it is really hard to have a feature that bigger bright in your home. i think people want to get off the couch. they want to socialize with people. imax is a way to do that. >> there is talk about 4-d technology or the viewing experience is the next big thing and that that could incorporate scent, that could incorporate motion, your chair moving grade i had experienced something like this at theme parks. south korean companies are making moves into having your seats shake in conjunction with things going on in the theater during the film. is imax headed in the stretch and? -- in this direction? >> no, we are not. we have been in this business
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many years ago. we do think there is an audience for it. it is probably primarily a teen audience, which really loves the moving seats. i've been in them myself. they are pretty fun to go in for a time, but over the long run, that is more based on novelty then endurance. we are really focused on quality over the long-term. unless the director is going to be involved in programming all of these things, which come i think, most of them aren't, its not really consistent with their vision. we see ourselves as providing the best canvas in the world for the best painters of movies to paint on. i think that is inconsistent with some of these other new technology developments. >> we are not going to get a cinema with sent -- scent? >> our partner in korea actually wants to test something like that. we might test it in one place to see how it goes, but i don't think that is going to be big business for us. >> what is the next big thing for imax? >> clearly, laser is the next
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big thing. it is so much brighter. the contrast is so much better. i think people are going to see movies in a way they haven't been able to see them in the past. we are constantly evolving our sound system. i think sound is a really important part of the imax experience. we are looking at ways where we can move our brand. the brand is so valuable and so important, but right now it is only used in the context of the theaters. if we could think of other ways we could really make experiences better, particularly visual or sound experience is better over the long term, i think there are's places we -- i think those are places where we will look. if you can think of virtual reality glasses, or if you watch the old "star trek" show, the hollow deck -- they are ways of way, but those are the things we're thinking about. >> a hologram viewing experience could be in the works? >> i'm not sure it is in the
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next couple of years, but as technology evolves, that is something that would interest us. >> that was the imax ceo. the imax stock closing at $29 on wednesday, down about 2%. we are taking a quick break. still to come, a recap of the day's top business headlines. we have the fed, facebook, and plenty more. you don't want to miss it. stay tuned.
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>> welcome back to "biz asia america." these are the other top headlines we are watching for you. let's start off with the u.s. federal reserve. they have decided not to start tapering, at least the big stimulus plan they have been trying to cut back on. that means the central bank will
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continue its $85 billion a month for now. the bank will keep interest rates unchanged. over in brazil, after a 16 month , od x has filed for bankruptcy. the company's performance in the early days, promises made by the richest man in brazil, did not come to fruition. good news for one of the countries hardest hit by the global financial country -- crisis made spain is officially out of recession. the country grew a modest 1/10 of 1% the last quarter. it is the 110th anniversary of the harley davidson iconic motorcycle company. they want to help provide egypt's tourism sector. tourism has dropped in the wake of political violence, but harley davidson wants to reverse that trend i gathering hundreds of bikers for a ride to the pyramid.
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our correspondent takes us there. >> you can tell a harley biker anywhere. the famous black jackets, their gear, and shining expensive bikes. in egypt, they are a growing community. >> we meet every friday. early in the morning, because of traffic in cairo, and then every 45 days come every month, we go out for a long journey. if you are a new writer, -- rider, we introduce you to the community. and then you start writing with us. you get into the group gradually. >> harley bikers were known in the past for being a rebellious group that enjoys breaking the rules. now the prices of these bikes range from $20,000 to $60,000 in egypt, and so the owners are quite a different breed with a different image. the harley bikers don't just go biking for fun, but they also
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feel they have a moral duty towards the country.that's why they've gathered here , more than 200 bikers at 8:00 in the morning, in front of the pyramid's. they were joined by others, honda's, bmws, and more, in an initiative to help promote the tourism industry in egypt. >> we decided to do something instead of just having a parade. we decided to do it for the love of egypt. >> at huge convoy of cairo. they stopped at the foot of the grand pier mids of giza, took pictures, had rest, and moved back to the city. >> it is for charity and also for tourism, to tell everybody all over the world that egypt is safe. >> the bikers hope this initiative is are peaked every month with the revenue allocated
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to a different charity organization every time. bikers, it seems, are not always as rough or gangly as they look. cctv, kyra. >> i don't know if i've ever seen him so happy before. who is the most powerful person in the world? according to forbes, russian president vladimir putin is number one. he knocked off u.s. president barack obama, down to the number two spot. obama is followed by chinese president xi jinping. we go russia, america, and china. german chancellor angela merkel rounds out the top five. fascinating stuff. michele mccoury is in new york city. it thinks are watching her, thanks for watching us. we will see you tomorrow. captioned by the national captioning institute --www.ncicap.org--
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